Why Our Parents Had More Money at Our Age

Specifically, in 1984, an adult aged 35 and younger, had an average net worth of $11,521. Nowadays? An adult that age has an average net worth of $3,662.

So, in 1984, that age group had more than three times as much money.

The decline is not because every generation is suffering right now. Those 65 and older have more money now than the same age group did back in 1984: Adults 65+ in 2009 had an average net worth of $170,494, while that same group in 1984 had an average net worth of $120,457.

What's even worse is how the spread between the age groups has grown: Back in 1984, those 65+ on average had about ten times as much money as those 35 and younger. Now, they have 47 times as much money.

So, what's going on here?

College, Marriage and (Housing) Bubbles

One big reason for this depressing news goes back to that never-ending source of economic woes: the housing bubble.

As the Pew report says, "Older Americans also have been the beneficiaries of good timing, in the form of the long run-up in home values that enabled them to accumulate wealth via home equity. Most of today’s older homeowners got into the housing market long ago, at “pre-bubble” prices—half purchased their present homes before 1986, according to the 2009 American Housing Survey."

So even though the recent housing bubble burst has hurt everyone, older Americans were able to build some equity beforehand, so they have more of a cushion. Additionally, a majority of them (65%) don't currently have a mortgage.

Younger Americans, on the other hand, tended to buy housing at high prices, and now that the bubble has burst, their homes are less than what they paid for them.

Aside from housing, younger Americans are also disadvantaged because of two other trends: First, younger Americans tend to start out with more college debt than older Americans did. And second, they tend to marry later, which means they also start to build their wealth later.

Our Takeaway

First, if you're feeling the pinch financially, take a deep breath and realize you're not alone.

Second, though we're not in the luckiest of economic times right now, we have control over our own spending and saving. So, take a look at your budget and your regular expenses and make a decision to make sure your spending lines up with your priorities.

Lastly, remember that just as with everything else in life, things will change. So if you're in a financial tough spot, buckle down and keep your chin up. And if things are going smoothly for you now, savor it and be prepared for whatever comes next.

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LearnVest Planning Services is a registered investment adviser and subsidiary of LearnVest, Inc. that provides financial plans for its clients. Information shown is for illustrative purposes only and is not intended as investment advice. Please consult a financial adviser for advice specific to your financial situation. LearnVest Planning Services and any third-parties listed, discussed, identified or otherwise appearing herein are separate and unaffiliated and are not responsible for each other’s products, services or policies. LearnVest, Inc. is wholly owned by NM Planning, LLC, a subsidiary of The Northwestern Mutual Life Insurance Company.